PRESENTATION OF FINANCIAL STATEMENTS

Section 211 provides that every balance sheet of a company shall give a true and fair view of the state of affairs of the company as at the end of the financial year and shall, subject to the provisions of the said section, be in the form set out in Part I of Schedule VI, or as near thereto as circumstances admit or in such other form as may be approved the Central Government either generally or in any particular case. In preparing the balance sheet due regard shall be had, as far as may be, to the general instructions for preparation of balance sheet under the heading “Notes” at the end of that Part. The profit and loss account of a company shall give a true and fair view of the profit or loss of the company for the financial year and shall, subject to as aforesaid, comply with the requirements of Part II of Schedule VI, so far as they are applicable thereto. It is further provided that nothing contained in the above provisions shall apply to any insurance or banking company or any company engaged in the generation or supply of electricity or to any other class of company for which a form of balance sheet or profit and loss account, as the case may be, has been specified in or under the Act governing such class of company.

However, if in the opinion of the Central Government it is necessary to grant exemption in the public interest, it may, notification in the Official Gazette, exempt any class of companies from compliance with any of the requirements of Schedule VI, either unconditionally or subject to such conditions as may be specified in the Notification. The Central Government is also empowered, either on the application of or with the consent of, the Board of directors of the company, order, to modify in relation to that company any of the requirements of this Act as to matters to be stated in the company’s balance sheet or profit and loss account, for the purpose of adapting them to the circumstances of the company. For the purposes of section 211, any reference to a balance sheet or profit and loss account shall include any notes thereon or documents annexed thereto, giving information required the Act, and allowed the Act to be given in the form of such notes or documents, except where the context otherwise requires. Schedule VI, which deals with the form of the balance sheet in Part I, with requirements as to the profit and loss account in Part II is discussed hereunder. Part III defines and interprets certain lessons while Part IV contains an abstract of the financial statements and a general business profile of the company.

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